HERE ARE SOME COMMON TERMS YOU'LL SEE ALONG THE WAY
Coinsurance is usually a percentage of the cost for a service that you would pay. For example, if your coinsurance is 20% for covered services, your plan would pay 80% of the covered charges, and you would pay the coinsurance of 20%.
COPAYMENT
A fixed dollar amount you pay at the time you receive a covered service, such as a doctor’s office visit.
COVERAGE GAP (DONUT HOLE)
Most Medicare drug plans have a coverage gap (also called the “donut hole”). This coverage gap begins after you and your drug plan together have spent a certain amount for covered drugs. Not everyone will enter the coverage gap because their drugs costs won’t be high enough.
DEDUCTIBLE
An amount you must pay for covered services within a given year before the insurance company or Medicare begins to pay. For instance, if you have a $500 deductible, you must pay for the first $500 in covered medical expenses before your health plan pays.
EXCESS CHARGES
The amount a provider might charge you over the Medicare-approved amount.
FORMULARY
A list of covered prescription drugs along with their formulas, uses, dosages and methods of preparation.
GUARANTEED ISSUE RIGHTS
Rights you have in certain situations when insurance companies must offer you certain Medicare Supplement (Medigap) plans. In these situations, an insurance company must sell you a Medicare Supplement policy, cover all your pre-existing health conditions and can’t charge you more for a Medicare Supplement policy regardless of past or present health problems.
MEDICARE-APPROVED AMOUNT
This is the amount a health care provider can be paid for a service.
OUT-OF-POCKET MAXIMUM
The most you’ll have to pay for covered services within a certain amount of time (usually one year).
PREMIUM
The fixed amount you pay monthly for coverage. Depending on your health or prescription drug coverage, you may pay your premium to Medicare or a private insurance company.
PRIMARY CARE PHYSICIAN (PCP)
This is the doctor you see first for most health issues. Your PCP may coordinate your care with specialists and other health care providers to ensure you get the care you need to manage your health.